Question

Access Delta Airline 10K Annual Report for the fiscal year ended December 31, 2019,

1. Analyze financial section
2. Analyze weighted competitive strengths, opportunities and threat.
3. Analyze the internal and external environment

Answer 1

1. FINANCIAL ANALYSIS

• Adjusted earnings per share of $7.31, a 30% increase year over year

• Total revenue increased to a record $47 billion, up 7.5% when prior year period is adjusted for third-party refinery sales and the sale of DGS

• Total expense increased 3.9% with CASM-Ex up 2%, in line with the company's guidance and long-term cost targets

• Delta's 90,000 employees will share a record $1.6 billion profit sharing payout on Feb. 14

• Generated $8.4 billion of operating cash flow and $4.2 billion of free cash flow

• Returned $3 billion to shareholders through dividends and share repurchases

2. Delta has grown into one of the industry-leading airline services of the world.

• Customer Service
• Culture
• Purchasing Old Aircrafts
Strategy
• Reliance on North American
market
• Hub and Spoke System
• Past Financial Issues

Opportunities
• Capitalize on New Technology
• Become Greener
• Circulate Good Press
Threats
• Potential Travel Bans
• Depressions and Recessions
• International Disasters

Throughout these three reports I have looked at Delta Airlines’ performance in the
Airline Industry. Through several different types of analysis such as Porter’s Five Forces, the
PESTEL model, and the SWOT model I have conducted a full internal and external analysis of
the company and from this analysis I developed the strategic questions that I think are the most
important for Delta to focus on. I have also provided my personal recommendations for what
actions Delta should take in the future to address these questions. I hope that this report has
provided a well-rounded analysis of Delta’s past and present as well as useful recommendations
of where the company should go in the future.

3. External Analysis

Technology is a huge factor in the airline industry. New innovations are being
invented everyday and it is important for the airline company to keep up with advancements. In-
flight entertainment and free wifi are now considered an essential need by most flyers and it is
important that airlines provide these accommodations and anticipate new technology that may
soon emerge. These technological changes also give Delta a chance to differentiate themselves
from their competitors. On October 1st, Delta will become the first U.S global carrier to offer
free in-flight mobile messaging.

Internal analysis

Threat from new entrants:
The threat from new entrants in the airline industry is really low in airline industry. The
industry is really hard to break into and it costs an extraordinary amount of money. The entry
costs are high, the operating costs are high and the competition is high. It is even harder for a
new airline to get a piece of the market share, airlines that have been around for years still have difficulty gaining market share. Customers also value name recognition in this industry so an
unknown name is unlikely to attract new customers. All in all the threat of new entrants is low
and it is unlikely to change anytime soon.
Threat of substitutes:
The threat of substitutes is medium in this industry. Since the flying is the only way to
travel to certain destinations there is no real substitute for airlines. The only substitutes that exist
are other modes of transportations such as trains and cars. Unless a new form of travel is
invented this threat will continue to remain the same.